REVERSE PAYMENT PATENT SETTLEMENTS: NAVIGATING THE ANTITRUST LIABILITY IN THE PHARMACEUTICAL INDUSTRY.

Abstract

Affordable healthcare is the foremost policy objective of states and it is generally determined by the quality of drugs available in the market and the reasonableness with which they are priced. In turn, the success of this objective principally depends on the factors which govern a pharmaceutical industry such as, the costs incurred in research and development of new drugs, the validity of patents on new drugs and the revenue generated from their exclusive exploitation. These factors often prompt the innovator drug companies to pay off their generic counterparts to avoid stiff competition from them in the drug market and maintain market exclusivity beyond what the term of their patents permits. Given the constant interaction of Intellectual Property Rights and Competition law in the pharmaceutical sphere, such pay offs or rather settlements have drawn the attention of the competition authorities from across the globe which are now vehemently scrutinizing the behavioral abuse by drug companies and the anti-competitive nature of the pay for delay settlements agreed between them. A quick glance makes it sufficiently apparent that when the healthcare of consumers at large is concerned, the exclusivity offered by patented drugs cannot be unreasonably stretched for unilateral profit motives of drug companies.